How to tax betting and bettors has been a point of contention between the regulated industry based in the UK and overseas operators ever since the online gambling market was liberalised by the last government. Changes announced in this Budget could cause some serious consolidation.
That's because George Osborne has moved to tax online bets at the point of consumption - according to where they are placed - rather than upon the domicile of the company taking the bet. The Treasury expects the revenue generated to rise to £270m a year by 2016.
The long-expected change opens a new debate about which direction the online industry will now take. The industry is worried that up to 40 per cent of gamblers could switch to unregulated offshore operators if the tax were rate were set higher than 15 per cent. The Budget gave no clarity on the rate, but a parallel scheme announced earlier this year to force operators to be licensed if they take bets from UK punters is seen as the start of a stricter enforcement regime - as is the imposition of duty on fixed-odds betting terminals.
